Vedanta to shutdown Odisha’s Lanjigarh refinery

Anil Agarwal-owned Vedanta has decided to shut its one million tonne alumina refinery at Lanjigarh in Odisha’s Kalahandi district due to non-availability of bauxite ore and the falling global metal prices.

“We ran this unit with all commitment for nearly a decade despite heavy odds. But with the current market turmoil, which is not likely to improve soon and in absence of access to bauxite ore from within the State, the plant is operating with a daily loss of Rs 3 crore. Hence, we are forced to initiate the process of gradual closure,” Vedanta’s chief operating officer (COO) KK Dave said.

The top official today held a meeting with the employees and other stakeholders including representatives of local communities to apprise them of the economic non-viability of Lanjigarh refinery.

The decision would impact nearly 10,000 people directly and the region at large as the CSR (Corporate Social Responsibility) initiatives of the company like Mid-day Meal in 187 schools and the Vedanta Lanjigarh Hospital that provides free medical treatment will get affected, Dave said.

“In the absence of bauxite ore supply from Odisha, the current market dynamics has threatened our very survival. With a heavy heart, we are bound to take some steps which are going to be painful,” said Abhijit Pati, chief executive officer (CEO) (aluminium), Vedanta Ltd.

Notably, Vedanta has not disclosed the timeframe for closure of the refinery. However, it is likely to take over a fortnight to complete the shutdown formalities.

It may be recalled that Vedanta had earlier in December 2012 had shutdown its unit temporarily for over seven months due to economic non-viability and shortfall in bauxite ore supply.

Earlier this month, Vedanta decided to suspend production at the rolling mill at its Korba facility in Chhattisgarh owing to aluminium prices going below the production cost.